Thursday, August 30, 2007

I feel like I have a lot in common with Bruce Bartlett. So he has a lot more real-world experience and influence than I do, makes a lot more money than I do, rubs elbows with people who are a lot more important than I do, and...

Ahem! Enough of where we diverge. We have similarities worth mentioning. We both think the Bush Presidency has been bad for the Republican party and the country. We both make a living dealing with the federal income tax structure. We both have problems with the labyrinth governing it, known as the Internal Revenue Code. We don't share the same view of the FairTax (the plan for a national consumption tax to replace the federal income tax), however.

Before delving in, I do not know what rate would be required to truly be revenue-neutral. Bartlett claims it would have to be higher than what is proposed by Congressman Linder and Senator Chambliss (the two guys who have Congressionally sponsored the FairTax in their respective chambers). Estimates of government 'revenues' should be taken as rough approximations, especially when they entail a change in the method of collection. Even when nothing major changes in the tax structure, the predictions are routinely off. This fiscal year, for instance, the Budget Office had originally underestimated total receipts by $39 billion.

Does adding 30% to the price of every house sold sound like a good idea to you?

About three-fourths of sales are of existing, not new, homes. The FairTax would apply only to new goods and services. So only a quarter of houses being sold would be subject to that 30% premium. This is a major factual omission on Bartlett's part, as he is insinuating the tax would be included on 40 million or so home sales each year, instead of the actual 10 million or so that would actually be effected.

He discusses the most conspicuous point of confusion over the FairTax, the debate over whether the tax rate would be 23% (as proponents claim) or 30% (as opponents claim):

In reality, the FairTax rate is not 23%. Messrs. Linder and Chambliss get this figure by calculating the tax as if it were already incorporated into the price of goods and services. (This is known as the tax-inclusive rate.) Calculating it the conventional way that every other (This is called the tax-exclusive rate.) [sic]

The distinction is confusing, but think of it this way. If a product costs $1 at retail, the FairTax adds 30%, for a total of $1.30. Since the 30-cent tax is 23% of $1.30, FairTax supporters say the rate is 23% rather than 30%.

The premium on goods and services indeed would be 30% over their tax-free cost. When you pay $1.06 for a $.99 cent item at the store, the rate of sales tax you're paying is generally thought to be 7%, not 6.5%. That is, the conventionally understood rate is the tax-exclusive rate.

But keep in mind that the FairTax is designed to replace the federal income tax. In contrast to sales tax rates, federal income tax rates are conventionally understood to be their tax-inclusive rates.

If you, as a bachelor, make $5,000 (a low figure for the sake of simplicity), your tax rate is 10%. You owe $500. You are actually keeping $4,500 for your toiling while the government is getting $500. While the government is putatively taxing you at a rate of only 10%, it's taking over 11% of what you actually net.

In terms of the government's total take, then, comparing sales tax rates with income tax rates as each is traditionally understood (one tax-exclusive, the other tax-inclusive) is an apples-to-oranges comparison.

The tax-inclusive trick, like your potential 'refund', is a way of perceptually minimizing the impact of the government's take in the eyes of the taxpayer.

Bartlett's arguing in opposition to the FairTax, so understandably he highlights what becomes more expensive without pointing out what will become less costly:

The FairTax would apply to 100% of services, including medical care, thus increasing their cost by 30%. No state comes close to taxing services so broadly.

Of course, used products from cars to IPods would become more affordable. They would not be subject to any federal tax whatsoever. Additionally, our part-time college bachelor would now have an extra $500 in his pocket to spend on them. And while a trip to the massage therapist will cost a few bucks more, he'll have the $500 extra for it as well.

More generally, the FairTax, relative to the federal income tax, favors the manufacturing sector of the economy more and the service sector less. It also encourages an export-based rather than an import-based economy. Firms providing services rendered overseas (service exports) stand to benefit enormously, as the income derived from the services provided would not be subject to any taxation in the US. Ditto manufacturers who produce in-country and sell abroad.

That is, it encourages people to make money and discourages them from spending it, exactly the opposite of what the federal income tax does. It also encourages people to take better care of and extend the life of products they buy instead of tossing them out with the first scratch and buying a new replacement. Money will move from immediate consumables to capital investment.

He continues by pointing out a problem that Charles Murray has a solution to, even if the scholar has not officially tied his proposal to the FairTax (yet?):

Since sales taxes are regressive--taking more in percentage terms from the incomes of the poor and middle class than the rich--some provision is needed to prevent a vast increase in taxation on the nonwealthy. The FairTax does this by sending monthly checks to every household based on income.

Aside from the incredible complexity and intrusiveness of tracking every American's monthly income--and creating a de facto national welfare program--the FairTax does not include the cost of this rebate in the tax rate.

Actually, the FairTax does not send out monthly checks based on income. Legal residents receive a monthly rebate based on family size (a single guy with no children receives less than a married couple with three kids does). There is no earnings ceiling or phaseout. Income is irrelevant. So that bit about the "incredible complexity and intrusiveness of tracking every American's monthly income" (as is essentially done now, with the self-employed on a quarterly basis and everyone else on an annual one) is bunk. That the WSJ op/ed board let Bartlett make an argument on an entirely faulty premise does not speak well for its diligence.

Does the monthly rebate sound familiar? In principle, it is similar to what Murray lays out in In Our Hands, where he argues for an end to most governmental programs in favor of a simple monthly 'stipend' to all legal Americans. The major difference is one of magnitude--Murray's stipends are upwards to eight times as large as the FairTax rebates. The FairTax might lay the groundwork for what Murray wants. The 'infrastructure' would already be there.

The practical implementation of the plan raises some important questions:

Among the problems: What possible incentive would the states have to be vigorous in their federal tax collections? What is to stop them from slacking off and giving their citizens a tax cut at federal expense?

Legal mandate. Some amount of federal enforcement would be required.

Currently, though, what incentive do I have to accurately report to the IRS the amount of money I made last year? W-2s bind me, but my only incentive (other than a sense of ethical or patriotic duty) is the threat of fines or worse for tax evasion.

What about the work I do on my own, for other individuals? What's my incentive to report that? As it stands, the threat of the stick is laughable. At least with the FairTax, both the guy I performed the work for and myself would have to lie. As it stands now, only I need be dishonest.

The IRS estimates the 'tax gap' to be north of $350 billion annually. Would evasion be lesser or greater under the FairTax plan? Like estimates of total government receipts, it's hard to tell.

Bartlett continues:

What about states with no sales taxes?

There are five small states, representing less than 2.5% of the total US population, that do not currently levy a sales tax (although some cities and counties within them have their own sales taxes). Presumably, they would have to collect on behalf of the federal government. Setting up the necessary apparatus to make this happen would likely lead these states to institute sales taxes of their own.

He also asks:

What's to stop people from bypassing retail outlets and buying their goods from producers or at wholesale, tax-free?

The consumption tax is to be levied on sale to the ultimate consumer. This would not change if I ordered a loveseat factory-direct.

He concludes:

Perhaps the biggest deception in the FairTax, however, is its promise to relieve individuals from having to file income tax returns, keep extensive financial records and potentially suffer audits. Judging by the emphasis FairTax supporters place on the idea of making April 15 just another day, this seems to be a major selling point for their proposal.

Yet all but six states now have state income taxes. So unless one lives in one of those states, this promise is an empty one indeed. In short, the FairTax is too good to be true, and voters should not take seriously any candidate who supports it.

I can do your Kansas return in ten minutes. Depending on your situation, the federal return may take several hours. For those of you who file on your own, do you not save the state return for last? It's dessert. The quick-and-easy final touch to the yearly tedium that you've just slogged through.

It's disingenuous to call the "Make April 15 just another day" slogan deceptive. It is, pithily packaged, their mission statement. The FairTax coalition also wants to end income taxes at the state level. If eliminated at the national level, there would be tremendous pressure at the state level to do the same.

Bartlett does not make mention of it, but a major benefit of a national sales tax is that it severly undermines the attractiveness of illegal immigrant labor. This isn't surprising, as he is a fan of the immigration status quo.

For one, paying people under-the-table becomes a non-issue. Income isn't taxed. So paying the undocumented illegal who shows up at the construction site and goes by the simple name of Pedro $10 an hour no longer confers an advantage over paying John Smith who has a Social Security card, a residential address, and a accessible background the same amount. Both guys pay the same in taxes--it's forked over when they go to McDonald's for lunch and buy a pack of smokes at the convenience store.

Further, because illegals are not entitled to the monthly rebate that citizens are, they go into the labor market at a disadvantage. When the foreman is deciding between Joe and Pedro, Joe bargains for his wage knowing that he has a check for $300 coming at the end of the month.

Medical researcher Dr. Klaus-Martin Schulte recently updated this research. Using the same database and search terms as Oreskes, he examined all papers published from 2004 to February 2007. The results have been submitted to the journal Energy and Environment, of which DailyTech has obtained a pre-publication copy. The figures are surprising.

Of 528 total papers on climate change, only 38 (7%) gave an explicit endorsement of the consensus. If one considers "implicit" endorsement (accepting the consensus without explicit statement), the figure rises to 45%. However, while only 32 papers (6%) reject the consensus outright, the largest category (48%) are neutral papers, refusing to either accept or reject the hypothesis. This is no "consensus."

The figures are even more shocking when one remembers the watered-down definition of consensus here. Not only does it not require supporting that man is the "primary" cause of warming, but it doesn't require any belief or support for "catastrophic" global warming. In fact of all papers published in this period (2004 to February 2007), only a single one makes any reference to climate change leading to catastrophic results.

In statistical work, the generally accepted level of confidence required for an analysis to be considered precise enough to take seriously is 95% for technical subjects, downwards to 90% for social subjects. The IPCC report seemingly pulled the 90% threshold figure out of thin, er, thick, air, with this in mind. The actual view among climate scientists comes nowhere near this overwhelming figure, however. Indeed, the summary, written by politicians and given to policy makers and released to the media, represents not a consensus or even a majority opinion, but the conclusions of a minority coalition of Luddite environmentalists, UN bureaucrats, and neo-Malthusians.

There is no reason to legislate at any level on behalf of their whimsical desires.

Wednesday, August 29, 2007

The WSJ's Kim Strassel indicates that the op/ed board is in the seminal stages of abandoning a couple of its most ludicrous claims, downplaying the first:

Here's some math for the numerically challenged at certain GOP campaigns: Bob Dole got 26% support from the Hispanic community and lost. George Bush in 2000 got in the mid-30s and barely made it to the White House. By 2004, the president had increased his share of that vote to close to 44%, and won decisively.

At least, she needs to augment this with other relative data. Dole received 46% of the white vote, Bush took 54% in 2000, and then 58% in 2004. That proportional increase in the white vote represents over 11 million voters. By contrast, even using the inflated 44% figure, the Hispanic improvement translates to 1.3 million voters. The increase in the white vote meant nine times more additonal votes for the Republican Presidential candidate than the rise in Hispanic support over the same period did.

Anyone who claims that Bush garnered 44% of the Hispanic vote in the 2004 Presidential election reveals himself to be an ignorant amateur. The actual percentage is somewhere between 38%-40%, in line with Bush's improvement from 2000 of about 3% across the geographic and demographic spectrums.

For the numerically challenged, if in not a single state in any of the four broad regional geographic categories (East, Midwest, South, and West) did the percentage of Hispanics voting Republican equal or exceed the Hispanic percentage for that entire region, it is not possible for the regional totals to be as high as they were initially reported to be.

Clearly, the "key swing states" are much whiter than the rest of the electorally predictable states are. So in reality the size of the national Hispanic vote overstates, not understates, the actual importance of the Hispanic electorate in Presidential elections. Strassel has the second part of that excerpted sentence completely backwards.

Where Strassel comes up with the 7%-8% range is unclear. In 2002, Hispanics votes comprised 5.3% of the total in 2002, 6.0% in 2004, and 5.8% in 2006. If the average increase of about .2% per election cycle continues, her low-end estimate will not become plausible until sometime in the middle of the next decade. Still, that the use of hard numbers, wrong though they are, is even attempted is a marked departure from the usual WSJ open border advocacy pieces.

Strassel wants the majority of Hispanic voters to become reliably Republican. Well, an ethnic minority that stands to gain from affirmative action mandates and is concentrated in urban areas, with lots of social and cultural pathologies, political ineptness, low educational attainment, and high entitlement usage, only becomes the profile of the Republican voter if the GOP moves sharply to the left of the Democratic party.

If you're a partisan, everything the party putatively stands for is subordinate to its hold on power. If you're a grassroots activist, a donor, or just an informed voter, however, what the party stands for is of greater importance than the number of politicians who have the capitalized letter next to their names. This distinction is academic, though, with the humiliating resignation of Karl Rove and the electoral failure of his grand pandering strategy.

It's not an academic distinction to Strassel, however. It's hypocrisy. She wants the party's boosters to give up on their own interests and throw in to support hers. For them, it's party first. For her, it's her own ideology first.

Realizing that non-partisans are not going to be swayed by appeals to do the party well at all costs, Strassel throws out the common argument that on a couple of 'hot-button' issues, Hispanics are socially conservative:

This resonated in particular with foreign-born immigrants, who are more socially conservative on issues such as abortion and marriage...

The First Amendment prohibits government from promoting religion; it does not prohibit the government from taking steps to protect health and safety.

The New Testament juxtaposes itself to the ritualism of the Old (as did the Lutheran and especially Zwinglian reform movements with regards to the Catholic Church), so compulsory actions along the lines of foot-washing have few parallels in contemporary American Christianity.

But the issue might conceivably arise. Say, hypothetically, head-rinsing in a university's drinking fountains led to demands for the construction of baptismal fonts at multiple locations on campus. Drinking from the same place that grimy college hair and face are washed is not a healthy practice. As is the case with the footbaths, secular people would be able to make use of the fonts as well. Would the ACLU, to avoid this problem brought on by an action entirely religious in nature, lend its verbal support for the fonts in the face of church-state criticism?

Some logic. Because a religious practice is unsanitary, special accomodations must be made to make it less so. Public resources must be used to ensure this. Taken to its logical conclusion, this argument may be employed in support of any religiously-influenced structure on public lands and/or with public funds that could conceivably serve up some health benefit, even if that benefit is realized in merely moving away from the rest of the general public the very believers who created the health concern in the first place.

Friday, August 24, 2007

A troop of vervet monkeys is giving Kenyan villagers long days and sleepless nights, destroying crops and causing a food crisis.

Earlier this month, local MP Paul Muite urged the Kenyan Wildlife Service to help contain their aggressive behaviour.

But Mr Muite caused laughter when he told parliament that the monkeys had taken to harassing and mocking women in a village.

The monkeys are sexually harrassing the village's women as they till and harvest their land. As is the case with virtually all other primates, vervet troops are male-dominated. These guys are being crass lads while they plunder. Despite their lack of cultural sophistication, the monkeys are able to see through the lady villagers' vain attempts to throw off the societal chauvinism that distinguishes men and women:

Nachu's women have tried wearing their husbands' clothes in an attempt to trick the monkeys into thinking they are men - but this has failed, they say.

"When we come to chase the monkeys away, we are dressed in trousers and hats, so that we look like men," resident Lucy Njeri told the BBC News website.

"But the monkeys can tell the difference and they don't run away from us and point at our breasts. They just ignore us and continue to steal the crops."

Africa is the best place to see just how wrong the feministic worldview is. Vervet monkies display gender differences in toy preferences similar to those of humans, with males choosing trucks and females choosing dolls. Gender differences are innate. Even though the biggest of these monkies struggle to top 20 pounds soaking wet, they're brazen. The women may play soldier, but they can't hold a candle to their warrior men:

They say the monkeys are more afraid of young men than women and children, and the bolder ones throw stones and chase the women from their farms.

So, Nachu's fierce fighters to the rescue, right? Why are the villagers pleading for the Kenyan Wildlife Service to get involved, when the monkeys are afraid of the village's men? This is Africa. The men don't sully themselves with work. Their women do all that.

The Service isn't ameliorating the situation by telling the villagers not to harm the monkies, which are protected. By contrast, in most other African countries they are considered pests and can be killed with impunity.

This is almost surreal:

The residents report that the monkeys have killed livestock and guard dogs, which has also left the villagers living in fear, especially for the safety of their babies and children.

All the villagers' attempts to control the monkeys have failed - the monkeys evade traps, have lookouts to warn the others of impending attacks and snub poisoned food put out by the residents.

Rhodesian Ridgebacks aren't well equipped to face a band of clever vervet monkies. We need to send the tribe some pit bulls, a breed much better suited to tackle a troop.

More than surreal, though, this is depressing. These people cannot defeat a band of monkies. Think about that. The average IQ for Kenya is estimated to be 72, meaning roughly half of the population would be deemed mentally retarded in the US. Presumably, higher IQs are more concentrated in large cities like Nairobi. So attempts at organization and the setting up of obstacles to keep the monkies away are probably sorely lacking in efficiency and effectiveness.

Wednesday, August 22, 2007

A trial court judge in Kansas recommended a year in jail for an illegal Hispanic cocaine pushing immigrant (who employed his young son in the operation). The ultimate charges Martinez pled to would have only landed him on probation, but the judge deemed it impossible for him to comply with probationary requirements--obeying the law, chiefly--when he was in flagrant violation of the law by way of being his unlawful residency status:

"Mr. Martinez is illegally in the country and is in violation of the probation rules right from the start if I place him on probation," court documents quoted Judge Hannelore Kitts as saying. "He has to comply with all the conditions of the probation and he can't do that because he's in violation of the law not to violate any federal or state laws."

The judge then rejected the plea agreement's sentencing recommendation and ordered Martinez to spend a year in jail.

Kitts' ruling was overturned. The judicial logic employed by the appellate court to do so is, well, illogical:

In its opinion, the court explained that Congress had implicitly created the distinction: "While Congress has criminalized the illegal entry into this country, it has not made the continued presence of an illegal alien in the United States a crime unless the illegal alien has previously been deported," said the opinion.

Ah, so murdering someone is a crime, but there's nothing wrong with being a murderer. Sound reasoning for sure. The court also cited a ruling from the fifties, expaining that laws regarding illegal entry into the country "are not continuing ones, as 'entry' is limited to a particular locality and hardly suggests continuity."

Uh, we see he is here, but we don't know that he ever actually came here. Well, no, he was born in Mexico. No, no, he never had authorization to come to the US. But we're still not sure he ever actually arrived. Yes, he's standing right here. Where are we? In Kansas, in the US, like I said. I told you, while we know he was in Mexico and now he is in Kansas, we don't know if he ever came here. There's no way we can be sure of that.

It's tantamount to having the suspected father of a child, who impregnated the 12 year-old mother, take a paternity test that reveals him to indeed be the father. But when the prosecutor later tries to get papa on statutory rape, the judge repudiates the prosecutor by arguing that just because the baby is his, he didn't necessarily have sex with the mother.

Or is "continuity" to say that, for example, you commit a crime once, but so long as it seems unlikely that you'll do it again, there's nothing to worry about?

In either case, this is yet another example of how it is an act of aggression against the citizenry of the US, permitted to continue by a derelict government that is charged with, above all, protecting its citizens from foreign invasion.

More than half of black and Hispanic applicants for teaching jobs in Massachusetts have failed a crucial state licensing test.

Since the start of the test nearly a decade ago, 52 percent of Hispanics and 54 percent of blacks failed the writing portion of the test compared to a 23 percent failure rate among white applicants.

Blacks and Hispanics also fall behind white applicants in other test subjects like English, history and math.

These merit standards are getting in the way of the diversity the Board of Education is seeking. Really, that's the major concern raised from these dismal figures:

Education officials say the gap is making it harder to bring more diversity to the state's teaching ranks.

Competency would be nice, but diversity is a must. A must! The severity of the situation has forced the Board to oh-so-surprising measures:

The problem is so persistent that a special state task force of teachers, state education officials and hiring directors has been set up to find out why minorities don't do better on the tests.

Uh, I'll save Bay State educrats eons of time and gobs of money. I'll even work pro bono and I'll deliver the goods right now. I must say, though, I'm a bit taken aback by the Board's inability to see the answer that is in plain sight.

A failure rate of over 50% probably strikes readers as being indicative of a test that is overly difficult for the modest intellectual abilities necessary to teach K-through-12. I suspected as much as well. This is the most intelligent state in the union and these test-takers all have college degrees, after all.

We're off the mark. Take a look at the practice questions from previous exams to gauge for yourself. The link provides fifty multiple choice and short-answer questions and a couple of expositions on the open-ended writing section of the test. Here are a few of them:

If sentence 5 contains an error in spelling, capitalization, or punctuation, select the type of error. If there is no error, select D, "senctence correct."

These firms, which include such large and well-known corporations as General Motors and Home Depot, all have a proven track record of sucsess.

49. The following sentence contains one or more errors (e.g., in grammar, usage, punctuation). Rewrite the sentence in proper form.

After we convinced him that we were, who we claimed to be, he lets us into the arena.

Although the school of education has never been known to house budding Einsteins, these are not difficult items. Test-takers are not penalized for incorrect responses (as opposed to skipping items entirely), and while the grading metrics are (intentionally) shrouded, it appears that scoring a mere 70% (if that) is required to pass.

Why not have a companion set of tests for teachers as exists for students via the NAEP? The averages at the state level would probably track well with NAEP scores for students, since populations that have lots of bright members will likely produce relatively sharp teachers as well. Although it might reveal a trend that is common in economically undeveloped countries, where the most promising intellects shuffle off into government bureaucracies for lack of prospects in the private sector. So maybe we would find Michigan's teachers to be the nation's most intelligent.

Imagine if, as a parent, you discovered your child's English teacher didn't know how to use quotations indicating speech properly, as in the second question excerpted above. Well, most states do not have academic prerequisites for teachers that are as vigorous as the ones Massachusetts has in place. So it wouldn't be surprising if your kid's teacher really didn't know when to use quotations.

I expect the Massachusetts Board of Education will 'remedy' the problem by giving more weight to the open-ended sections of the writing tests and less to the binary multiple choice questions, as well as watering down the tests' overall difficulty. There'll be hand-wringing over institutional and societal racial bias as well. Conspiciously, there has been no word on how Massachusetts Asian hopefuls have been faring.

I'm doubtful that competent teachers matter much in the performance of the student body at large (although if Massachusetts teachers are, like Massachusetts students, among the most intelligent in the country, it would give the impression that they do). Boosting the IQ of the student body by a few points will do a lot more for their performance than installing a crop of Joe Clarks will. But these teachers are better able to challenge the most gifted students who are neglected by legislation like No Child Left Behind than dull teachers are.

An NAEP for teachers, even if it occured, would be but a baby step. The entire educational system needs to be made over.

Introduce market forces by putting the $800 billion spent on education into the hands of students through vouchers (there is the problem of dull kids from affluent families being forced into classrooms with the underclass that would have to be addressed--although there would be institutions that would charge some amount above the per-pupil voucher amount that would make the cost prohibitively high for kids from rougher areas). Allow students to take tests demonstrating mastery of various subjects, and let the free market find ways for them to do so most efficiently (video recorded lectures by the best of the best teachers, online materials, accelerated learning, etc). Vocational education would replace more theoretical and conceptual learning for students to whom such theory will remain hopelessly arcane.

Monday, August 20, 2007

The trumpeting of smug atheists, especially Richard Dawkins, gets under my skin. The irritation is caused primarily by the media hosts, not the committed atheists. Dawkins, held up in these pieces as a rogue iconoclast, goes from fawning venue to fawning venue, where he is asked soft questions that allow for him to be portrayed as a relentless seeker of the truth.

Wow, you mean a Man-God didn't descend to the earth's center to spar with the Devil for a few days before rising back up through the crust and into a kingdom in the clouds? It's ignorant to maintain as much? Oh, how perspicacious, how erudite Dawkins truly is! I doubt Dawkins watches TV--he probably doesn't even own one (atheists aren't necessarily materialists, after all)!

In the typical interview, it is insinuated that a belief in God reveals idiocy. Idiots might believe in the Celestial Teapot, which is the same as believing in Zeus, which is the same as believing in the Trinity. There's the obvious issue of staying power, strongly suggestive of some evolutionary benefit of the nature of the belief, which Russel's item is mostly devoid of, Zeus had some history of, and the monotheistic God of the Levant has tons of. But maintaining their existence is unempirical and unnaturalistic.

Regarding atheism versus theism, the irreducible debate is reducible to this: By definition, natural laws and methods of investigation do not hold for the supernatural (if such a conception actual exists). No matter how outlandish, it cannot be positively proved or disproved. As best as can be done--relegated to the natural as we are--it's like telling someone who has a handful of lottery tickets (whatever the stated odds may be, to be drawn at some indefinite date in the future) that he cannot possibly win and should stop thinking that he might, or what he'll do with the money when he does.

It may seem absurd for him to think these things, but the drawing not having occured, absolute certainty is impossible. The vastly more important issue is how having those tickets alters his behavior. He's probably not the sharpest tool in the shed, else he wouldn't have bought in so heavily to begin with. Yet, did his acquisition of the tickets lower his IQ? Is it causing him to have more children, or fewer? To be empathetic, or socially oblivious? To do great things, or terrible ones?

What fills the teleological void? Existentialism, cynicism, hedonism, brights, unfettered impulsivity, empiricism? Many readers (myself included) favor the last. But that's not an option for someone with an IQ of 80. The Brights movement and cynicism probably aren't, either. Maybe they'll aspire to be soul survivors.

The idea of assigning people a mental age has become anathema. Political correctness aside, the idea provides for an illustrative hypothetical. You're the parent of three, ages six, ten, and sixteen. Your oldest feels insulted if you try to tell her she had better be good because if she isn't, Santa won’t bring her any presents. She wants a pragmatic and humanistic explanation as to why she should be nice to other people.

The ten year-old believes in Santa, but wants to know why the jolly guy wants people to be nice to one another—a sort of in between stage.

Your youngest, enticed by presents, will likely behave if he thinks there are presents on the line. But tell him he should be good because self-restraint is fulfilling in itself and it makes the world a better place... you’re a fool if you expect an angel. He's going to find a more compelling set of commands in Bonestorm.

That's what the media hosts should have Dawkins talk about. Tie it into his genocentric worldview--why do genes allow their hosts to so foolishly believe in a creator? Morever, why does that ignorance appear to be the winning strategy for the genes of the contemporary person? Fecundity and religiosity correlate at a statistically significant and vigorous .71 at the national level. Religious genes are mopping the floor with atheistic ones. The two arguments Dawkins is most famous for--that genes are everything and God is nothing--do not seem to mesh well in that the genes that think God most important on the ones who carry on. How to explain this?

That would be a much more stimulating interview than the predictable ridicule directed at the belief that an ancient virgin in ancient times conceived of a kid who could walk on water. That defies the laws of physics! Uh, you think? Is this elementary school? And this guy is a genius?

Yes. Among other things, he coined the word "meme". He is absolutely brilliant. It's a tragedy that he has to squander it by running through all the in vogue media circuits, saying the same predictable things that every college student has heard in the open discussion of his Philosophy 101 course.

Sunday, August 19, 2007

On Friday morning, local radio host Chris Stigall had on Arizona Senator John McCain. During the interview, Stigall asked McCain about immigration, to which the Senator responded with his newly-professed support for tougher border and interior enforcement without (immediate) legalization.

Stigall then set McCain up perfectly on the Senator's 'strongest' issue, asking if he was heartened, given his courageous military past, by the VFW's support for the Iraq surge. McCain responded by first reiterating his firm support for tougher immigration enforcement and opposition to "rewarding lawbreakers". He closed on immigration by saying, "I promise you that." This as Chris mentioned they were running up against a break. Stigall lobbed him a softball but he didn't swing, too focused on the issue of immigration.

McCain's Presidential campaign is finished. He's the most publicly influential Senator both in supporting an increased US presence in Iraq and in supporting open borders (if not second to Ted Kennedy in the latter case), positions the public strongly opposes. These two strikes are followed by a third--he's too old. He's fallen into a distant fourth in GOP Presidential polling, and he's even less popular among politically-engaged primary voters. His staff has been remade in desparation, the same desparation from which this disengenuous emphasis on immigration restriction has been made.

But that he would grasp at tougher immigration policies in trying to keep himself afloat is a testament not only to the salience of the issue at the grassroots level, but also of the influence of 'second tier' pro-sovereignty candidates like Tom Tancredo. Duncan Hunter and Ron Paul may not have the name recognition of Giuliani or McCain, but they're forcing the frontrunners to move swiftly to the popular positions they take, lest those frontrunners allow themselves to be meaningfully contrasted with the rest of the contenders.

Contrasted in the view of the general public, anyway. In the eyes of the discerning public, Tancredo, Hunter, and Paul (in that order of succession) are the restrictionist movement's champions, while McCain and Brownback have been its most steadfast antagonists. Written off before the campaign began, the three restrictionists continue in their roles as gadflies, while the latter two have been the two most 'surprising' early flops in the race.

The discount rate is distinct from the funds rate, the latter directly influencing adjustable and new mortgage, credit card, and auto loan rates. But cutting the discount rate by 8% provides a cheaper source of cash for banks and lenders who are reeling from the subprime meltdown. Keeping the marginal lenders afloat now kicks the can down the road, making the inevitable that much more painful.

It's similar to the federal $15 billion bailout of the airline industry in late 2001. Too many carriers remain today, with optimal economies of scale being difficult to attain. This bleeds into customer service and raises questions about every airlines' long-term financial stability. At least in that case, though, there was reason to be sympathetic toward the carriers.

The immediate nature of this fix is fitting, really. To ameliorate a problem that arose from a short-term focus on granting as many loans as possible as quickly as possible, the Fed uses a short-term 'solution'. While it's being billed as symbolic, it has substance. It's precursory, as it indicates the Fed will almost certainly raise the funds rate in September.

The economically marginalized are most hurt by these subprime loans, as they tend to be disproportionally oriented for the short-term. I want the three bedrooms now, even if the stars must align to make the minimum on the house, the car, and the three credit cards! Instead of defaulting, going under, and being forced (due to bad credit) to live within their means, the Fed is saying "Let them dangle on the edge of the cliff a little longer while we help out the profligate lenders."

Hopefully Bernanke, who must have felt forced into lowering the discount rate (he's a fan of government-provided liquidity, but is hesitant to pull the trigger on interest rate cuts), will strike out at the shrouded status of Freddie Mac and Fannie Mae which, while not backed by explicit government guarantees, are considered necessary by the government to buoy the amount of cash available for new loans. With this excess paper money floating around, banks and their S&Ls feel competitively obligated to accept less of a risk premium on the loans they make. That liberality, made worse by the mandating of "equal housing lenders" in 1988, has brought this all to a head.

Boiled down to its essentials, lenders are making overly risky loans without an adequate required return because they 1) Feel they can count on government intervention like the liquidity injections that have taken place over the last week and now the hasty discount rate cut, 2) Are able to sell their loans to Freddie and Fannie so they can use the cash to make more loans, and 3) Feel pressured into making questionable loans, less they face the wrath of FHEO, even when demographic/lifestyle data of potential borrowers causes them to hesitate.

This skews private lending in the US toward perpetual easy money. The precipitous market declines are going to get worse in the coming months. Bandaids like the discount cut only treat the symptoms. We need to overhaul the sickly body to prevent this from happening again.

Wednesday, August 15, 2007

A state's live-in desirability, as defined by CQ Press in the form of a livability index that considers 44 social, cultural, and economic factors, rigorously correlates with that state's estimated average IQ. The correlation using my numbers is .78, while using VCU Professor McDaniel's subsequent better numbers yields an r-value of .80. In both cases, the p-value is effectively zero.

That .80 constitutes a stronger relationship with livability than with any other variable considered. Keep in mind, the importance of IQ underestimated by this method, as many of those variables are part of the 44 used to gauge livability--in this sense, they have a built in statistical advantage that the IQ estimates do not have. Other correlations with livability include:

Illegitimacy rate (-.68)Average life expectancy (.62)Racial composition of the population (.62)% of the population with a bachelor's degree or greater (.56)Violent crime rate (-.54)Unemployment rate (.50)Per-student educational expenditures (.45)Gun ownership rate (-.44)Median age (.20)

It even 'explains' slightly more than the poverty rate (r-values of .801 to .797) does, the only variable that approaches IQ's significance. Interestingly, though, IQ and poverty correlate at a more modest than expected .59. They do not relate to livability in the same way, but instead act as the two primary pillars on which it rests.

Imagine a white person born in 1961 who came from an unusually deprived socioeconomic background: parents who worked at the most menial of jobs, often unemployed, neither of whom had a high school education (a description of what it means to have a SES index score in the 2d centile on socioeconomic class). If that person has an IQ of 100-nothing special, just the national average-the chance of falling below a poverty-level income in 1989 was 11 percent. ...

Conversely, suppose that the person comes from the 2d centile in IQ but his parents were average in SES status-which means that his parents worked at skilled jobs, had at least finished high school, and had an average income. Despite coming from that solid background, his odds of being in poverty are 26 percent, more than twice as great as the odds facing the person from a deprived home but with average intelligence.

The Bell Curve brought to the public mind the importance of IQ in the US, and data marshalled in IQ and the Wealth of Nations evinces how meaningful it is at the national level. It's not everything, but it's increasingly becoming clear that it is quite a lot. Raising it should become a primary policy goal.

Inevitably, such an approach will be criticized for insinuating the moral worth of people based on an attribute that is largely beyond their control. That kind of posturing is, however well-meaning, injurious.

Why not make the same argument about attempts to reduce obesity or the prevalence of autism? If there are ways to increase physical fitness or reduce the number of children born with autism, through a systematic revamping of foods to have a lower glycemic index or by encouraging men to have all their children before they reach their fifties, does that too insinuate that obese or autistic people are of lesser moral worth? Is such didactic posturing worth increasing the prevalence of obesity or autism?

Anything that could raise average IQ a few points would do more to boost economic growth and lower social pathologies than increased educational spending or the other typical liberal or free market libertarian nostrums.

To oppose methods to boost average IQ (incentives for the wealthy/intelligent to have more children, the poor/unintelligent to have fewer, ensuring adequate iodine intake and vitamin consumption for impoverished children, a merit immigration system, discouraging the use of mind-altering substances), or even the discussion of potential ways to do so, must be challenged with this: There is nothing socially or economically benign that correlates inversely with IQ. I believe that is about tautologically true--I've come across nothing to the contrary, except for fecundity, which is debatably desirable.

The ethical lapses didn't help the GOP, with three-quarters of voters considering ethics and corruption as important to them. Of those, Democrats had the edge by a 55%-45% margin. Still, sense aside, of the 56% of the voting electorate that disapproved of the Iraq war in the 2006 mid-term elections, 80% voted Democratic. With Congressional approval today (25%) at the same dismal level it was prior to the party-change last November, that more US troops are stationed and dying in Iraq than a year ago, the failure of the Democratic party to ameliorate the situation is similarly hurting its leaders.

The board then goes on to focus on the electoral poodle, ignoring the elephant:

Mr. Rove believes that a GOP that alienates Hispanic voters will soon be a minority party, and in this he is surely right. President Bush won 44% of the Hispanic vote in 2004, and a decline to Bob Dole's percentage of below 30% in 1996 would make it hard for any Republican President candidate to win in New Mexico or Colorado, and perhaps even Arizona and Nevada.

That the board repeats the fallacious 44% figure illustrates how little its members care about what actually happened. That number is clearly too high. But obsequious peons are what many corporate leaders want, so that's what must be justified, veracity be damned. I wonder why, if unskilled, uneducated Hispanics are crucial to a strong economy, Gigot and the boys don't pack up and move to Mexico, where they are in abundant supply.

Monday, August 13, 2007

Analyst consensus: Without Rove, President Bush would never have been born; Friends suggest Laura should begin planning funeral arrangements

Comical how in virtually all the media reports on Rove's departure, two contradictory points are emphasized:

1) Rove was not only the architect of political campaigning, but of everything from staffing concerns to foreign poilcy issues, and 2) Nobody knows what took place in conversations between Rove and Bush, because that has all been kept under wraps.

Researchers said several factors have contributed to the United States falling behind other industrialized nations. A major one is that 45 million Americans lack health insurance, while Canada and many European countries have universal health care, they say.

But does that provide the simple solution? An argument easily used against government-provided healthcare as a panacea is that of the 44 countries that provide free healthcare, 25 have an average life expectancy lower than that of the US. Americans live longer than residents of most of the countries that provide universal healthcare do.

Compared to northwestern Europe, however, the US is near the back of the pack (at 78.0 years), according to the CIA factbook.

There is a problem in comparing the US with the rest of the Euro-descended world. It crops up in other places as well (although in this case it's effects are relatively mild): Almost one-third of the US population isn't white. Black Americans die nearly six years before whites do. Accurate data on Hispanics are harder to come by (the CDC reports I found historically tracked only whites and blacks), but just removing the black handicap puts the US at about 78.7 years, the same as the European Union on the whole. This adjustment leaves the US behind most of affluent Europe, but by a small amount. It is even with the UK, and ahead of Finland, Ireland, Poland, Denmark, and Portugal (all of which have universal health systems in place). Attributable to the remaining variance in part is that we eat more, work longer, and sleep less than our European counterparts.

A similar phenomenon is seen in infant mortality, where the death rate is twice as high among black Americans as it is among whites.

Of course, US drug companies subsidize much of what is produced in the rest of the world as legal generics or outright duplication. Spending on pharmaceutical research and development in the US far outstrips that of any other country (see page 11). The US healthcare industry, of which pharmaceutical companies are a part, is rarely acknowledged in this regard when such criticisms of the US' lack of universal coverage are made. That the blockbuster drugs may be prohibitively expensive for many, the part of the US market that will buy them is the a driving force behind them being made in the first place. Government-funded healthcare will disrupt this.

With universal coverage more costly in the US than the rest of Europe due to demograhics, I'd like to see the insurance providers and private industry tackle the problem in a few other ways:

- Disqualify smokers, drinkers, recreational drug users, and people who are overweight or obese from company-sponsored healthcare plans, or charge them less favorable rates. Many companies do this to some extent using vice questionnaires, but more should go the way of Weyco and cut people who voluntarily put themselves at high-risk (and by extension, high-cost).

- Insurance companies should be able to provide unfettered catastrophic insurance coverage. Throughout the US, there are around 5,000 mandaates across various types of coverage plans relating to what must, by law, be covered and to what degree. I haven't been to a physician in years. I'm young, workout regularly, eat well, and do the necessary hygienic stuff. Why should I have to pay $50 a month for my employer-sponsored healthcare coverage? That's as cheap as I can go without being uninsured. I should pay one-fifth of that, cover my own doctor and dentist visits, and kick the remaining $40 into investments or spending.

Imagine how expensive car coverage would be if the automobile insurance market worked in the same way as healthcare coverage does. People would take vehicles in for minor things, like small hood tents, that might cost $500 in body work--things they would not have otherwise had done. If I wanted liability on an old clunker, I'd have to pay much more in getting coverage for things I wouldn't want covered and would be better off paying out-of-pocket for, if at all. The success of companies like Progressive, and the benefit they provide to consumers, is sorely needed in the healthcare arena. In addition to cost reduction, market forces would also incentivize healthier behavior. Progressive doesn't put up with bad drivers. I'd like a healthcare insurer that doesn't deal with the overweight or smokers.

Advocates of quasi-socialist systems frequently point to the successes of European nations by comparison to the US. In so many instances, like when comparing income inequality or social pathologies, racial demographics are crucial to garnering an understanding of differences. But the omerta on discussions about different behavioral patterns by different racial/ethnic groups obfuscates this. The trend means the whitest European nations have the most expansive entitlement structures in the West, the Scandanavian countries being the kings of the hill.

The importance to leftists: Importing lots of unskilled, uneducated third-worlders works against what you support. They strain the welfare system and fail to contribute as much as they consume, rendering it untenable in the long run. They increase criminality so markedly that liberal policies on crime also become untenable.

Saturday, August 11, 2007

Any other blogger-using readers had an embedded YouTube link eat an entire post? It happened to me last night, and the autosave function finalized the disappearance, so that the post on the Fed window and funds rate only included the title since I posted it Friday afternoon.

After rehashing everything I'd lost, albeit in a sloppier manner, I tested it again, backed up this time, and the same thing happened--the entire post vanished.

I disagree with Jim Cramer's plea to the Fed, even if he got the window opened for awhile like he wanted. He's made quite a name and nestegg for himself in pushing hedge funds that have managed 20% returns in a market growing at a real annualized rate of about 3%. The math doesn't seem to add up, and now the same hedge funds Cramer's been championing are being obliterated as their investors salvage what they can and evacuate as quickly as possible.

At the risk of sounding out-of-touch by being cautiously encouraged by the pummeling the market has taken over the last month, this is not the time for the Fed to subsidize the financial lending industry or lower the funds rate (and by extension the prime). Lenders are being hammered today for years of easy money, at a time in which too small a return was demanded for the amount of risk being assumed. That profligacy is being answered for. To cut the funds rate would be to subsidize these lenders and effectively push the needed tightening further down the road.

Your local bank makes loans across the spectrum, from subprime to full covenant. In order to garner a greater number of subprime borrowers, it offered historically low rates for the risk involved, errantly presuming the real estate market would continue to zip along at double-digit annual growth rates indefinitely. Consequently, when subprime borrowers began defaulting on their mortgages back in late May and early June, the bank did not have an adequate number of on-time subprime borrowers (nor were they being charged high enough rates) to cover the losses.

What does the bank do? It stops making as many subprime loans, demands more for them, and moves adjustable rate mortages upward. The bank's not doing this simply because it feels necessitated. The institutions it borrows from (like NewAlliance), and the institutions they borrow from (like Citigroup), have in turn raised their rates across the board as well. This trend is self-perpetuating, as the rising rates make it more difficult for other subprime and alternate lenders who are on the cusp to stay ahead.

Parenthetically, it's sad that upwards of seven million people may have to default on their home mortgages. But for many overextended borrowers, a default is a blessing over the long-term. Many of these borrowers are paying far more in interest than they are in principal, acquiring almost no equity while spending nearly every penny they have. The real estate bubble, more so even than the tech bubble before it, unleashed unrealistic expectations of impossible growth (we're talking about wood and nails, not seismic technological leaps, after all). Looking off on the horizon, a sobering adjustment is best.

A funds rate increase makes money easier to come by as the banking industry is trying to make it tougher. Essentially, the effect on the local bank is more money for lending purposes and artificial relief for subprime borrowers in over their heads. We're back where we started, with people taking out loans they can't (and should not attempt to) pay for.

The stellar economic growth that has taken place since 2002 has been primarily fueled by unjustified, stellar real estate performance. As more people have taken out loans, prices have been pushed up. But that upward pressure has come by paper wealth. The growth has been built in part on a house of cards. With reality catching up, the markets have taken a beating.

Why is this problematic? Besides excess volatility being bad for innovation and entrepreneurial activity, such a focus on new condos, second homes, and beach resorts is not the way for the US to remain on the cutting edge of the global economic and technological arenas.

I make $30,000 a year working. I spend $40,000 a year buying consumables (stuff that doesn't represent a future monetary benefit). I've been doing this for five years. Fortunately, I own a house that was worth $100,000 five years ago. Every year over the last five its value has been increasing by $11,000. To feed my consumption habits, I've been taking out a home equity loan for $11,000 on an annual basis. Thus, my net worth has been up $1,000 ($30,000income-$40,000spent+$11,000equity) for five years running.

But what happens if the value of my house crashes? Or just stops appreciating? My standard of living will have to be adjusted downward drastically. If not, I'll fall into debt and the whole miasma will be compounded by high interest rates. This is not a happy situation. Eventually something's going to give.

That eventuality appears to have now arrived.

Proponents of a Bernanke rate intervention, to accompany the $24 billion liquidity injection, argue that inaction will lead to recession (or as I see it, a necessary readjustment). Fortunately for the developed world, the painful brunt of an international downturn will be felt by the developing an underdeveloped nations of the world. When potential investors tighten up, they look for reliable, established places to put their money. As far as equity markets go, the US is the paragon of that stability. Latin America, Eastern Europe, Southeast Asia, China, and Korea will be in for a rougher ride than the US, Western Europe, and Japan will be.

Hispanics who are eligible to vote are less likely to register and less likely to cast a vote than either whites or blacks.

About 54% of Hispanics who were eligible to vote registered in November 2006. Among whites and blacks, the figure was 71% and 61%, respectively.

This figure is not based on the total size of these groups, in which case Hispanics would be expected to lag, since many of them are illegally present. It's based on the number of legal residents who are eligible to vote.

Several [Democratic legislators] tended to see Latin American immigrants and even Latino constituents as both more dependent on and accepting of active government programs and the political class guaranteeing those programs, a point they emphasized more than the voting per se. Moreover, they saw Latinos as more loyal and "dependable" in supporting a patron-client system and in building reliable patronage networks to circumvent the exigencies of political life as devised by the Founding Fathers and expected daily by the average American. ...

While acknowledging that they may not now receive their votes, [Republican legislators] believed that these immigrants are more malleable than the existing American: That with enough care, convincing, and "teaching," they could be converted, be grateful, and become dependent on them. Republicans seemed to idealize the patron-client relation with Hispanics as much as their Democratic competitors did.

This is hardly surprising, given the rampant corruption endemic throughout Central and South America.

Republican open border enthusiasts frequently claim that refusal to allow immigration law-breaking will turn the momentous Hispanic political force against the GOP. Nevermind that such an argument relies upon a willingness to sacrifice values and goals for purely partisan reasons, something that is hardly appealing to anyone who isn't receiving a paycheck from the party. The tocsin is fallacious. From the 2002 elections to the 2006 elections, for every one new Hispanic voter, seven new white voters went to the polls:

Hispanics accounted for 5.8% of the votes cast in 2006, up from 5.3% vote in 2002. In absolute numbers, an additional 800,000 Hispanics cast ballots in the 2006 election compared with the 2002 election.

Whites accounted for 81% of the votes in 2006, unchanged from 2002. In absolute numbers, an additional 5.6 million whites cast ballots in the 2006 election compared with the 2002 election.

Think about that. I'd previously argued that if Republicans convinced ten percent of the Hispanic electorate to abandon the Democratic party and throw their support behind the GOP, it would be a political wash if but 1% of white voters turned from the Republicans in disgust of such pandering.

More revealing, though, is to think of it like this: If every single new Hispanic voter pulled the lever for a Republican in the 2008 election, the GOP would gain nothing if one out of seven whites consequently went against him. Phrased in another way, if Republicans could do something to pick up one out of ten new white voters, it would be politically worth turning off every single new Hispanic voter--the GOP would still come out ahead.

Hispanics are increasing their share of representation among the total electorate, but whites clearly remain the 800-pound gorilla of American politics.

Yet the motivations extend beyond partisan dominance. The establishment forces have loosely overlapping motivations behind their support for the end of US sovereignty. The Catholic Church sees an opportunity for growth through the accretion of an impoverished, less intelligent Hispanic population from historically Catholic countries. Big business sees cheap labor willing to accept sub-standard labor conditions without complaint, with the added benefit of being able to subsidize the costly externalities of importing a Mexican proletariat on the net taxpaying American citizen. The political class, comprised of both Democrats and Republicans, sees a populous that will let it aggrandize power, accepting corruption and unwilling to challenge them as they grow the size, scope, and cost of government.

We need to disrupt this by keeping the pressure on. Immigration, because it is tied to everything from wealth disparity to disease prevalence, from welfare use to educational attainment, is the single most important issue we face. Stay on your Congressional representatives to build a wall along the US-Mexico border, go after employers who take advantage of subsidized immigrant labor at the expense of the native taxpayer and the native poor, demand an end to unskilled immigration, and advocate that legal immigration be determined by a merit system that ensures immigrants enhance the economic and social quality of life of Americans.

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Those foreign reserves come to more than $4,400 per US resident. China is by far the largest holder of US government debt instruments, and the country continues to extend that lead on a daily basis.

There are those who see this as, rather than a cause of concern, something to celebrated. By tying their holdings so intimately with US debt, the PRC has a strong incentive to see the economic strength of the US maintained. In the extreme case, if the US were reduced to having to default on the obligations, China would see $1.33 trillion--more than one-fifth of annaul GDP--go down the drain.

If China acted upon this threat and began a concerted selloff of its US debt holdings, the yuan would of course suffer alongside the dollar. But how much does Beijing care if that occurs? Less than policymakers in the US do. Keep in mind, by pegging the yuan to the dollar for so long (and now to a basket of currencies influenced by the dollar), the Chinese government has chronically kept the yuan weak for decades.

Further, because China is an export-driven manufacturing country, a drop in the yuan's value will only make it an even more favorable nation to buy goods from. Chinese workers will see their savings worth less in terms of what they can buy on the international market, but that will in turn increase what Chinese citizens buy from within China. As a poor country that is becoming less so with amazing alacrity, the average Chinaman is looking at a potential decline in the rate of his own enrichment, not an impoverishment.

Contrast this to the effects such Chinese action would have on the US. A drop in the dollar would reduce exports to the US. With an annual trade deficit of $764 billion and rising, that will be felt immediately in the form of increased prices for lots of different goods. In an economy that is growing by only a few percentage points, that means an abrupt drop in the average Joe's standard of living. Much of what the US physically exports are raw materials that return to the US at latter stages of product development, so the relative drop in the price of American-made products will be intially dampened.

China is better prepared, both economically and socially, for the shock than the US is, were it to occur.

Volkswagen AG is signaling it may build a new factory in North America, the latest sign of how the weak dollar is forcing European car makers to mull moving roduction closer to their U.S. customers.

The world's fourth-largest auto maker is also considering a major reorganization of its U.S. business to try to bring consumers and decision makers closer together, according to Stefan Jacoby, who this month was named chief executive of Volkswagen of America Inc.

We can accelerate a resurgence in domestic manufacturing by scrapping the federal income tax and replacing it with a national sales tax (also known as a consumption tax). This would make the US an ideal place to export from. It would also have the added benefit of making illegal immigration less lucrative, by axing payroll taxes of the legally employed, thereby reducing their costs to their employers relative to the costs of hiring illegal workers by about one-third.

Arkansas couple had a baby daughter Thursday — their 17th child and seventh girl - and the pair say they're still not ready to give it a rest.

The Duggars should be celebrated. He's a real estate professional with several commercial holdings and presumably plenty of wealth. Raising seventeen children presents an obvious financial challenge, but the family has no debt. He's likely an intelligent man. The Duggars are attenuating the wealth gap the surest way that it can be attenuated: By rich couples have lots of children and poor couples having few of them.

Further, by spreading their affluence across the lives of their children, most of whom are probably headed for college, the kids will have to work professionally or get a start-up going instead of being able to live penthouse lifestyles by merely managing a trust fund set up by their parents. Yet they'll have the resources to pursue whatever it is they have a knack for. Maybe there's a Mark Zuckerberg among the clan.

It's not desirable to have everyone adopting the Quiverfull movement, though. The steep rise in the illegitimacy rate, from a national rate of 8% in the early sixties to more than one-third of children born today, fuels all the other pathological behaviors that describe the contemporary underclass. Yes, demographic trends are partly responsible for the rise in illegitimacy (the contemporary Hispanic rate is 46%), but they only color a trend that has engulfed all of American society--just four decades ago the black out-of-wedlock birth rate (22%) was lower than the white rate is today (25%).

Just as social apropos should be given to fat cats who make babies instead of enjoying frivolous travel and cosmopolitan nightlife, the social stigma going the other direction needs to return. To do otherwise is to injure poor kids, who need more than anyone else to see their numbers reduced--and, by extension, the supply of unskilled labor--as demand for menial labor is reduced, else their plight (and the nation's Gini coefficient) be accentuated uneccessarily in the future.

Mocking the faithful doesn't seem to me a wise thing to do, so long as that faith doesn't mobilize enough support to seriously hamper scientific progress or educational curricula. The religious tend to be more nationalistic (anabaptists and Jehovah's Witnesses excluded), and the decline of Western religiosity has paralleled the decline in Western nationalism, both of which have paralleled the startling drop in the percentage of the global population that is of European descent (25% in 1960, 18% today, and 10% by mid-century). A Pew survey of white evangelicals, mainstream Protestants, Catholics, and secularists found support for immigration restriction proceeded in the same order, with evangelicals least supportive of current immigration patterns and "secularists" the most supportive of them.

Contrary to a shibboleth of the American right, family values do not uphold religion and country; they subvert them.

However, that's not applicable to the contemporary Western idea of family; that is, the nuclear family. Regarding extended kin, potentially encompassing tens and hundreds or even thousands of members, he's right. But the middle class married couple with a mortgage and a few youngsters running around in the front yard are a lot more nationalistic than the swinging Sex in the City downtown singles are.